1. Field of the Invention
The present invention generally relates to a methodology and apparatus for managing and controlling stability in Business Activity Management (BAM) systems.
2. Background Description
Business Activity Monitoring and Management is a technology enabling the visibility and monitoring of real-time business information. Examples are (i) Sense & Respond (see G. Lin et al. “The Sense & Respond Enterprise”, OMRS Today, April 2002, p. 34) and (ii) Supply Chain Event Management (see M. Bittner, “E-Business Requires Supply Chain Event Management”, AMR Research Report, November 2000). The underlying value proposition of this technology is that it enables the use of real-time information to update operational policies and manage execution accordingly.
In the typical usage of Business Activity Monitoring and Management systems, enterprise information is monitored in real-time or near real-time and converted to business performance indicators which can be displayed on dashboards or other visual form to different business role players. Also, different criteria can be specified to detect situations of interest to the business role players, triggering alerts in different forms that can prompt business responses. These alerts can take multiple forms, such as pop-up messages on a computer screen, an e-mail, a mobile phone call, and the like. The persons receiving this message makes a business judgement on the severity of the alert and potential business consequences and takes appropriate steps to modify the inputs that drive business process execution.
Although updating based on real-time information can be beneficial for operational management, it need not always be. In some cases, it can result in local operational improvement, while deteriorating system-wide performance. For example, the phenomenon of demand variablility amplification in a multi-echelon supply chain (also known as The Bullwhip Effect) has been recognized in many diverse industries (see H. L. Lee, V. Padmanabhan and S. Whang, “Information Distortion In a Supply Chain: The Bullwhip Effect”, Management Science, Vol. 43, No. 4, p. 546). Uncoordinated frequent actions, taken in response to changes in demand/supply information at the downstream sites in a supply chain, can cause excessively higher demand variability to the upstream sites, which, in turn, results in excessive inventories as one moves up the chain. A forecast-driven inventory control policy involving frequent updates is one of the key drivers of the demand variability amplification phenomenon. This raises the question of how to respond to real-time or near real-time information that is enabled by Business Activity Monitoring and Management systems in an optimal way without triggering any undesired effect on business performance.
The background described above indicates a need for stabilization mechanisms in Business Activity Monitoring and Management systems that enable the appropriate usage of monitored information, i.e., to improve business performance and not to have unintended consequences in business performance deterioration. This requires the usage of monitored information in a way, that all the instability factors, such as information distortion in the bullwhip effect case, are kept under control.